Job Losses Due to Trade Since NAFTA Deepen Pennsylvania Manufacturing Crisis

in
Publication Date: 
December 1, 2003

In the context of an intense national and state debate about the future of U.S. manufacturing, this briefing paper provides an update on the impact of trade on manufacturing jobs in Pennsylvania. It estimates job loss within Pennsylvania due to trade with Mexico and Canada, building on a paper released recently by the Washington-based Economic Policy Institute (EPI).


Our main findings:



  • Since 1993, the year before the North American Free Trade Agreement (NAFTA) went into effect, a rising U.S. trade deficit with all trading partners has cost Pennsylvania up to 150,000 manufacturing jobs.

  • A more precise estimate reveals that trade with Mexico and Canada has, since 1993, cost Pennsylvania 38,325 jobs, including 31,014 manufacturing jobs. Over the same period, trade with these countries cost the United States as a whole an estimated 879,280 U.S. jobs, 686,700 of which (78 percent) were in manufacturing.

  • Pennsylvania has experienced the seventh-highest job losses of any state due to trade with our NAFTA trading partners – Mexico and Canada. Only California, New York, Michigan, Texas, Ohio, and Illinois lost more jobs due to trade with Mexico and Canada since 1993.

  • The Pennsylvania manufacturing jobs lost due to trade with Mexico and Canada since 1993 equal 3.5 percent of 1993 manufacturing employment.

  • Manufacturing job loss tends to drive down wage and benefit levels:

    • In 2002, the average annual pay in Pennsylvania manufacturing was $42,852 while the average annual pay in service-producing industries (including high-paying ones such as health care and education) was $33,376;

    • The manufacturing-services pay gap is especially large in Pennsylvania rural areas, in some of which manufacturing still accounts for more than one in five jobs;

    • Most jobs in Pennsylvania accessible to displaced blue-collar manufacturing workers pay a lot less than $33,376. For example jobs in security services, call centers, and retail trade range between $16,000 and $22,000 per year.

This document is an on-line summary of a Keystone Research Center report. The entire report is available for download as a PDF file at the KRC Web site www.keystoneresearch.org © 2001 Keystone Research Center